Q1 2024 ANI Pharmaceuticals Inc Earnings Call
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Good day, everyone and welcome to today's <unk> Pharmaceuticals, Inc. First quarter 'twenty 'twenty four earnings results call.
At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session.
You May register to ask a question at any time by pressing the star and one on your telephone keypad.
You may withdraw yourself from the queue by pressing star and two please.
Please note. This call is being recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Lisa Wilson.
Thank you Shelby welcome to anti Pharmaceuticals, Q1, 'twenty 'twenty four earnings results call. This is Lisa Wilson Investor Relations for Eni with me on today's call Art, Mckeel, well, Wanni, President and Chief Executive Officer.
And Stephen Curry Chief Financial Officer.
You can also access the webcast of this call through the investors section of the a N I website and anti pharmaceuticals Dot com.
Before we get started I would like to remind everyone that any statements made on today's conference call that express a belief expectation projection forecast anticipation or intent regarding future events.
And the company's future performance may be considered forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are based on information available to and I Pharmaceuticals management as of today.
And involve risks and uncertainties, including those noted in our press release issued this morning, and our filings with the SEC.
Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statements.
And I, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
The archived webcast will be.
We'll be available for 30 days on our website and I pharmaceuticals Dot com for.
For the benefit of those who maybe listening to the replay or archived webcast. This call was held and recorded on may 10th 'twenty 'twenty four.
Since then and I may have made announcements related to the topics discussed.
So please reference the company's most recent press releases and SEC filings with that I'll turn the call over to Nicky a loved one.
Thank you Lisa.
Good morning, everyone.
Thank you for your interest in Eni pharmaceuticals as for joining our first quarter earnings call.
Our company remains committed to our purpose.
Serving patients improving lives.
On behalf of all of Eni.
We are grateful for the continued support.
Our customers suppliers partners and shareholders.
We remain focused on driving growth.
Continued growth to our rare disease business and our generics business.
Supported by strong cash flow from our established brands business.
We're pleased to report.
<unk> first quarter results.
Reiterating our full year guidance for total revenues cultural from gel revenues.
Adjusted EBITDA, and adjusted EPS, which Steve will further highlight.
Total revenues for the first quarter were $137 4 million an.
An increase of 29% over the first quarter of 2023.
Adjusted non-GAAP EBITDA was $37 6 million up 14% from the prior year period.
Adjusted non-GAAP EPS.
$1.21 an.
An increase of 3% over the first quarter of 2023.
Our lead rare disease asset purified controls and gel generated $36 9 million of revenue in the quarter a year over year increase of 126%.
Our rare disease team continued to execute on successful CT rofin gel commercialization in the first quarter.
Driving prescribing growth across our core specialties of neurology, rheumatology and nephrology as well less traction in our newer specialties of <unk>.
In ophthalmology.
We are pleased to report that the prescribing momentum has carried into the second quarter and we achieved the highest number of new patient starts since launch during the month of April.
On our fourth quarter call, we discussed several investments to support the core colson gel franchise with the goal of driving greater adoption across current and new specialty areas.
I'm proud to update you on the progress made on these initiatives.
First given the strong traction that we have seen in pulmonology.
<unk> plans to add a second geographical regions to our Pulmonology sales force.
This team is now in place and the increased focus is paying off with record new patient starts in the first quarter for Pulmonology.
We also deployed a small targeted ophthalmology sales force in the fourth quarter.
We see ophthalmology as a meaningful driver of future CT Rofin gel girl.
For both Pulmonology and ophthalmology, we also green traction with new two ACTH prescribers.
As you might recall in the fourth quarter, we all we launched a new one ml vial of court rofin gel for the treatment of acute garden gouty arthritis flares.
We believe that bringing the old meet ACTH product to them.
Market with this indication presents a promising growth opportunity for the core profit franchise.
We believe <unk> gel remains on a strong multiyear growth trajectory.
And then both by increased market penetration within core and new indications as well as further expansion of the total ECT its category.
While we have gained significant traction with court rofin gel after a little over two years on the market.
The number of patients on ACTH therapy today remains.
Essentially lower than a few years ago.
Our prescriber engagement activities and investments to drive growth continue to boost high utilization by far.
To boost higher utilization by first time, and returning ACTH prescribers as more physicians use CT rofin gel therapy for appropriate patients.
While we have ample opportunity ahead to maximize CT rofin gels potential.
Expanding the scope and scale of our rare disease business through M&A and in licensing remains a high priority.
We're actively evaluating opportunities with a focus on commercial assets that overlap with our current priority therapeutic areas of nephrology neurology, rheumatology Pulmonology and ophthalmology.
As well as assets outside of these areas.
Average our rare disease platform.
Turning now to our generics business.
<unk> delivered another solid quarter with revenue of $70 2 million, an increase of 10% over the first quarter of 2023.
Our strong new launch execution and operational excellence contributed to this performance.
Launched six new products during the quarter.
<unk>, a competitive generic therapy product with 180 day exclusivity.
Notably we retained our number two ranking for competitive generic therapy approvals and our top 15 manufacturer.
A number of product approvals.
Overall, our generics business remains a key growth driver as we leverage our high performance R&D team operational excellence and U S based manufacturing footprint.
We remain and established and reliable partner of choice for our customers.
Our established brands business continues to address patient needs.
A liability of supply a unique set of commercial capabilities and opportunistic business development to expand the portfolio.
Our overall portfolio is strengthened by this high gross margin low working capital and strong cash flow generation business.
With these results and almost $230 million of cash on hand, the first quarter has set a solid foundation for 2024.
We have many important initiatives and opportunities to execute on this year.
And we look forward to continuing the momentum.
And now I'll turn the call over to Steve who will walk through our first quarter financial results and 2024 guidance in more detail.
Steve.
Thank you Nicole and good.
Good morning to everyone on the call.
<unk> generated first quarter revenues of 137 4 million up 29% over the prior year period.
Revenues from core Trophy and gel reported in a rare disease segment were $36 9 million up 126% from the prior year period, driven primarily by increased volume.
As we previously guided core trophy, Joe revenues were down on a sequential basis due to the typical seasonality seen with rare disease drugs.
We continue to expect sequential revenue growth for core trophy gel in the second third and fourth quarter of 2024.
Off of this first quarter revenue achievement.
Revenues of our generics established brands and other segment were 125 million an increase of 11% over the prior year period.
Generic revenues for the quarter were $70 2 million, an increase of 10% over the prior year period, driven by increased volumes in the base business and contributions from new products launched in 2023 and in the first quarter of 2024.
Net revenues for established brands and other was $30 3 million in the quarter, an increase of 13% over the prior year period.
As we guided on the Q4 call the first quarter benefited from supply tailwind.
Cost of sales, excluding depreciation and amortization increased 30% to $49 2 million in the first quarter of 2024.
Compared to the prior year period.
Merrily due to growth in sales volumes of pharmaceutical products across all segments.
And significant growth of royalty bearing products.
non-GAAP gross margin was 64, 5%.
Decrease of approximately 145 basis points from the prior year period, primarily driven by product mix.
Research and development expenses increased 77% to $10 5 million in the first quarter of 2024.
Primarily due to a higher level of activity associated with both ongoing and new projects.
Selling general and administrative expenses increased 32% to 48 million in the first quarter of 2024.
Due to increased employment related costs and continued investment in our rare disease sales and marketing infrastructure and activities.
Higher legal expenses as well as an overall increase in activities to support Ani's growth.
During the first quarter of 2024, we completed the sale of our Oakville, Ontario, Canada manufacturing facility for $14 2 million and recognized a corresponding 5.3 million gain in the P&L.
We also recorded a $9 7 million gain on our shares of C. G oncology common stock triggered by C. G oncology initial public offering in January 2024.
When C G oncology purchased Ani's targeted uncle Lytic technology in 2010 <unk>.
C G oncology undertook to pay your yanai among other things running royalties and the amount of 5% on net sales of C. G 0070.
Also known as Credo statement Jean <unk>.
C G oncology, its sublicense fees or its affiliates in a territory contractually defined as the worldwide.
In February 2024 C. G oncology disputed gets royalty obligation to Eni that dispute is currently in active litigation.
Both the gain on sale of our Oakville facility and the gain on our C. G oncology equity had been excluded from the calculation of our non-GAAP EBITDA and non-GAAP EPS measures presented in this morning's earnings release.
Net income available to common shareholders for the first quarter of 2024 was $17 8 million as compared to 1 million in the prior year period.
First quarter diluted GAAP earnings per share was <unk> 82 cents as compared to six cents in the prior year period.
On an adjusted non-GAAP basis diluted earnings per share was $1.21 for the quarter.
Compared to $1 17 per share in the prior year period.
Adjusted non-GAAP EBITDA for the first quarter of 2024 was $37 6 million an increase of 14% over the prior year period.
We generated cash flow from operations of $18 3 million during the Q1, and we ended the quarter with $228 6 million in unrestricted cash.
We have $293 3 million in face value of outstanding debt, which is due in November of 2027.
At the end of the first quarter, our gross leverage was two one times and our net leverage was less than a half a turn of our trailing 12 month adjusted non-GAAP EBITDA of $138 4 million.
Finally as outlined in this morning's press release, we are pleased to reiterate full year 2024 guidance as follows.
Full year 2024, net revenues of 520 million to $542 million.
Coach Rofin gel that revenues of 170 million to $180 million.
Full year, adjusted non-GAAP EBITDA of $135 million to 145 billion.
Adjusted non-GAAP earnings per share between $4 and 26% and.
And $4 67.
We continue to expect total company adjusted non-GAAP gross margin between 62 and 63%.
And the company will continue the tax effective non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share using our estimated statutory rate of 26%.
The company now anticipates between $19 4 million and $19 7 million shares outstanding for the purpose of calculating calculating diluted EPS and now expects its U S GAAP effective tax rate to be between 22% and 25%.
As compared to 20% to 22% previously disclosed.
With that I will now turn the call back to Nico.
Yeah.
Thank you Steve.
We are energized by our <unk> results.
And look forward to building momentum throughout 2024.
The company remains focused on driving continued growth through our rare disease business and our generics business.
Both supported.
Our strong cash flow from established brands.
Thank you for your interest in Eni and supporting the team as we work to fulfill our purpose.
Serving patients.
Proving lives.
We look forward to keeping you updated during the year ahead, and we are happy to answer any questions.
Thank you operator, please open the line for questions.
Thank you at this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may remove yourself from the queue at any time by pressing star to once again that is star one.
To ask a question.
We will take our first question from Gary Nachman with Raymond James Your line is open.
Yeah.
Thanks, guys and good morning.
So first I'll correct, Chris Rofin, how much is the overall ACTH market growing versus you taking share in that market for <unk> XR and for your new patients that you said is an all time high in April.
Are they.
Most of them experience, who are naive to ACTH, maybe just explain those dynamics.
And then talk about the traction in the newer segments.
Especially OXXO since you just put that in place and do you think you'll increase investments in either ophthalmology or I guess pulmonology anytime soon.
Okay.
Thank you Gary and good morning.
Okay.
I'll take each question one by one.
Your first question regarding the overall ACTH market growth.
Both the competitor and we have spoken about the increase awareness and prescribing momentum within the category continuing to grow resulting in overall ACTH market growth.
From an overall market size perspective.
When you add our guidance of $170 million to $180 million revenues in 2024.
Our guidance, we expect that the overall ACTH market will grow in revenues.
Almost 10% and go back Directionally to the total market size than it was in 2021.
We also know that the number of patients.
Patients that are being treated with ACTH appropriate patients being treated with ACTH therapy.
Still substantially lower.
Then it was a few years ago.
So both.
There is a long runway of growth possible in the overall ACTH market.
And Thats why we remain focused.
Your second question regarding April new patient starts.
We try to strike a balance between sharing.
Sharing information that is helpful to investors as well as competitively sensitive.
Can say is that.
We're seeing growth across our core categories of neurology, Nephrology, rheumatology, which is what we launched.
As well as in our newer.
Categories of Pulmonology and ophthalmology.
Which is where your third question was about which was around the newer segments.
In Pulmonology.
We expanded our we.
We have started with with a smaller sales force in one region, we expanded that to a second region and we're seeing it.
Increased traction.
Resulting in the highest number of new patient starts in Pulmonology in the first quarter.
And as far as Ophthalmology goes we have the new ophthalmology team in place right. This was something that we put in place in the first quarter.
And we will.
We'll be looking forward to updating you on the progress.
Of this new Salesforce that we have.
Put in place.
I think the last part of your question was.
How do we think of increase investments in these newer areas.
And I think thats something that we.
As I said before we see a long runway of growth in the ACTH market and forecourt rofin gel and.
And how we sort of optimize and organize to capture that.
We'll determine will depend on a number of different factors, including the.
M&A deal that we're looking to do and what that organization may bring so that's that will be part of the.
Think about the future.
So hopefully that answers your questions Gary.
Yes.
Very helpful. And then just on that last point, where are you in your search for new rare disease assets.
Has the market been on those for you guys and do you think you should still be able to execute.
By the end of this year.
Yes.
Thank you for that question, Gary our corporate development team and the executive team has been quite active in evaluating the range of opportunities.
Available to us.
According to the criteria that we've talked about before.
Priority one remaining.
Gains us leveraging our existing sales force call points I E neurology and nephrology.
Battology ophthalmology in Pulmonology.
And then priority too.
It opened up the aperture a few months ago to also actively look at other rare disease indications.
Leverage our.
The remaining part of our rare disease infrastructure, right specialty pharmacy distribution and market access medical affairs patient support and other rare disease infrastructure compliance et cetera.
But we remain in terms of progress we continue evaluating multiple targets and.
And we remain focused on doing the right deal for Eni, which achieves our strategic and financial objectives.
And at this time, we remain confident that we will be able to do a deal that expands the scope and scale of our rare disease business.
Alright, Great and then just the last question you know, it's a pretty strong quarter for overall revenue you left the full year guidance intact. So how should we think of the cadence of the quarters for rest of the year for the various segments you touched a little bit Encore trophy and with the sequential growth, but maybe touch on all of the segments just sequentially.
And then just wanted to make sure was there anything unusual in there in the first quarter on the topline that we should be aware of thank you.
Yeah.
Yes. Thank you Gary So first quarter results were very much in line with the annual guidance teams that we presented on February 29.
Expense expected modest sequential decline in rare disease.
Given by the insurance resets and channel dynamics that are typical of rare disease.
We saw high single digit to low double digit increases in generics.
And as.
As we had spoken about the benefit of supply chain tailwind and established brands.
Looking forward to the remainder of the year.
We're confident in our ability to propel rare disease to $170 million to $180 million of annual revenues growth of 52% to 61% over 2023.
And as highlighted in our prepared remarks, we just spoke about this.
You've seen the highest of our new patient starts in the month of April and are continuing to build on that momentum.
And we're seeing.
Growth across specialty score specialties and the newer specialties.
For generics, we continue to be oriented to high single digit low double digit year on year growth with a continued cadence of new product launches, we launched six products in the fourth quarter.
And that cadence will continue.
Supported by strong operational excellence.
And then for established brands.
Our forward looking current guidance does not assume any further benefit from supply tailwind.
So.
Ah reiterated current guidance. This morning contains no further supply tailwind score established brands, which is consistent with the current market environment.
That answers that question.
Both of those questions regarding the rest of the quarter across the four segments as well as what we saw in Q1.
Thank you we'll take our next question from Les Sulewski with Trust Securities. Your line is open.
Good morning, guys. Thank you for taking my questions and congrats on the progress in Q1.
So first on the generics front, how much of that 10% growth, which is driven by new product uptake versus volume.
The legacy portfolio and I guess, what impact was due to a pricing tailwind if any.
And then you mentioned the <unk>.
<unk> in Q1 impacting branded products I guess, how does that kind of play out for the remainder of the year. If that comes off and then lastly, what is the reasoning on the dispute of the royalty rights by CG oncology. So we expect some sort of resolution this year or in the near term.
And would that be in a monetary settlement or do you think you have a case for retaining these royalties. Thank you.
Yeah.
Good morning lesson. Thank you.
Your first question regarding.
The.
The 10% growth of <unk>.
In generics.
How much of that was from new launches versus volume versus pricing.
Okay.
Again, we tried to strike a balance in terms of the information that we share wanting to be helpful. We do not typically break break this out.
In terms of what is the.
Revenues, how much came from new launches versus.
Baseline products, where we can say is.
As the other industry leaders the generics industry leaders have been saying there is an improvement in the pricing environment for the generics market driven by a number of different factors.
Including the challenges faced on supply by other players.
Well, we can also say is that our new product launch cadence continues right.
And we had six new launches in the fourth quarter, and we expect that new launch cadence to continue over the subsequent quarters and then finally, our baseline business remained strengthened by our strong operational excellence strong GMP track record across our manufacturing sites are.
Manufacturing sites are in the U S and all of these factors help us be a partner of choice for our customers and that strengthens our generics business.
Your next question was on the supply tailwind and the future outlook for the same.
So.
The we did see supply related tailwind for the fourth quarter, we reported that on the February 29 conference call that we would include it.
In the first quarter.
Yes.
Benefits from supply tailwind.
Only included for quarter, one for established brands in the guidance that we gave.
And that continues to be so.
And we our reiterated guidance assumes there'll be no further benefit from supply tailwind for established brands.
Yeah.
On the third question regarding CGM ecology, and the litigation I will turn it over to Steve to take that question.
Well, thank you Nicole and good morning, Les and thanks for the question.
Ani's policy is not to comment on pending litigation.
<unk> has filed filed suit against C. G oncology seeking various forms of relief.
The public record of Ani's suit against C. G oncology provides additional background.
I would also refer you to footnote number 12 to our financial statements filed in Form 10-Q. This morning, which can be found on page number 27 and in there you'll find more information rigs.
Regarding the pending litigation and the status.
Thank you.
Okay.
Thank you will.
We'll take our next question from Danielle <unk> with Guggenheim Securities. Your line is open.
Danielle: Great. Thank you all for taking my questions hopefully you can hear me okay.
I'm traveling today, but just.
Couple of follow up questions on topics that you've talked about a little bit. So one in terms of established brands is this sort of supply tailwind is so the easing or using the current market dynamics, just suggesting less of a benefit can you just talk about how we should think about that segment.
On an organic basis going forward or what's the underlying growth or decline do you think is reasonable.
So Obama is now because of all of that.
<unk> tough to see what the underlying performance is and what you expect going forward.
Second question would be.
I appreciate the added color on the <unk> oncology litigation I'm. Just curious if you can talk about the stake in the company also so if you can just comment on sort of your sort of longer term interest in maintaining that stake and if that's in any way impacted by the litigation and then my third question is on the expense side, SG&A and R&D was up a little bit.
Danielle: Then what we had forecasted this of course I'm just curious is there any one time dynamics there.
Keep in mind as we forecast the rest of the year. Thank you.
Good morning lesson.
Thank you for joining and thank you for doing so.
Even though you're traveling we appreciate it.
So look our.
Speaker Change: And your first question right.
How to think about the outlook for <unk>.
Established brands, we reiterated our total company guidance of 520 to 542 million and revenues of this.
We continue to expect our lead rare disease asset CT rofin gel to deliver $170 million to $180 million.
Stefan generics established brands and others will do about $350 million to $362 million.
Speaker Change: For generics, we continue to expect growth in the high single digit.
Low double digit growth basis on a base of.
$270 million from last year.
And Thats, what freedom clearly for you how we think about established brands in the rest of 2024.
Please note that we have assumed no supply tailwind in Q2 through Q4 in this guidance.
And this is consistent with what we forecasted in February.
Original February 2009 guidance and consistent with current marketplace conditions.
Regarding the second question on CGM calls he again I'll turn it over to Steve.
Yeah, Bob and good morning, and thanks.
Thanks for taking our call this morning.
Steve: Yes in terms of our our equity position.
In in C. G oncology this is our position.
Harkens back to the November 15th 2010.
Transaction.
The company sold assets.
C G oncology.
And that at that time right way back in that time.
Our equity stake was 19, 9%.
Obviously during the intervening years that owner ownership position has been diluted down.
And upon C G oncology as the IPO in January of 2024.
Oh.
Just shy of 220000 shares of their common stock.
Which as you see as of March 31st was.
<unk> worked for about $9 7 million and that's reflected on our balance sheet.
Steve: In terms of our future plans for that holding.
Speaker Change: We're not going to comment on.
Speaker Change: On that this morning.
Thank you.
Yeah.
And then I assume.
I think your last question related to SG&A.
In the first quarter.
In terms of that.
I would say they ask if there was any one time items.
And then you know in the first quarter actuals.
Speaker Change: And on that question Bob.
There was none.
There's always kind of intra quarter puts and takes in.
Speaker Change: Certain variable spending, but nothing that I would that I would hold out as significant or material.
This morning.
As we said on the prepared comments right the best do lie.
The increase year over year does reflect principally our investments behind the people costs.
And within that category right primarily.
In terms of the expansion of our field force capabilities, and and sales and marketing support capabilities behind what drove that.
And in that regard right, where we're really.
As <unk> stated rate, we see a long multi year trajectory for for that product, which is obviously a core product for us.
And in that regard right, where we're investing behind it for the health and trajectory in the mid to long term.
Just one other thing to add.
Going back to the question tuned regarding CGM apology.
Yes.
Going back to what Steve said that when CG oncology, what Steve said in his prepared remarks, when CGM ecology purchased Eni's targeted oncologic technology in 2010.
TJ oncology undertook to pay Eni among other things running royalties and the amount of 5% of net sales of <unk> and rows and rows seven zero also known as <unk>.
Just wanted to add that in addition to the points made on the equity position.
Okay. That's alright, thank you very much.
Thanks, Paul.
Thank you we'll take our next question from Oren <unk> with H C. Wainwright Your line is open.
Thanks, I have a couple.
Encore Trophy, then can you talk about the evolution of the disease.
Oren: Value for patients as you continue to expand the launch into broader specialties and indications.
And the one millimeter one millimeter launch I guess I'm trying to remember, which patient indication to use the drug for a longer <unk> at higher doses and is your expansion into pulmonology ophthalmology in gout is that putting upward pressure on the sort of average annualized price or value per patient or not and I have.
A couple of follow ups.
Alright.
Again, thank you oren for joining our call.
I think that you know.
Again trying to strike a balance between sharing competitively sensitive information, but being helpful to investors I think the your characterization.
At the end.
Yes.
As appropriate which is that there is probably upward pressure on the value per patient.
With our look going into the newer specialty areas.
And we look forward to updating you on the progress on this as we move forward.
Okay.
Okay and one Q.
And that's an important quarter as you already called out for insurance resets and normal seasonal impacts.
But has your overall coverage.
For poor Trofim changed in the new year and reflected in Q1 or maybe kicking in later in the year on an absolute basis or your relative positioning versus back Sir.
Yeah.
Yeah.
Yes, Sir.
Again.
Trying to strike a balance I think that we are clear that our we're unambiguously clear that.
Our efforts.
Hum.
<unk> helped improve.
Access for the ACTH category and have played a significant role in making <unk> therapy available to appropriate patients in need and resulted in overall ACTH market growth.
And Im sorry.
Repeatable when you add our guidance of $1 70 to 180 to their guidance, we expect that the overall ACTH market will grow in revenues almost 10% and go back to.
So a number from 2021 and.
And we believe that there is a long runway of growth for the ACTH market, but the number of patients on therapy today significantly lower than patients. So a few years ago.
Okay.
On generics.
You know I guess implied in your guidance is.
It's still pretty steady growth through the year I think previously you indicated you expected some back half more significant launches in there or is that still the case or have you seen maybe.
Earlier, and better pull through of launches and so that cadence might have changed and specifically looking at <unk> and I know that has limited.
Utility in this space and you see one product ISI I mean that seems to have.
Shopped out in March or appeared in March and it looks like an important contributor I don't think you've ever press release that I don't even know what it is to be honest.
Is that something new and exciting and a material contributor or am I reading too much into it.
No.
Thank you for your question Oren I think the cadence of launches is in line with our expectation and puts us on track to deliver the high single digit low double digit growth for generics in 2024 and you can.
Expect this cadence.
To result in.
Oren: Sequential growth quarter on as you had pointed out to deliver the high single digit low double digit target for the full year.
Yeah.
One of the strengths of our generics business is the diversification right and we have over 100 product families that we that we sell and we do not have concentration either.
Across.
Across the product.
I believe so or in our new launches and.
So.
That's what we consider that as one of the strengths of our generics business and therefore don't have anything specific to add.
On any specific launch.
Adding the hyoscyamine.
Example, that you gave.
Okay and.
Again, I think just to follow on an earlier question lastly.
Yes, Q1 spending looked a little high or I guess, the implication is that with your full year guidance that that will basically be flat or even flat to down for the rest of the year am I interpreting that correctly.
Or are you just going to play it by ear on the guidance front end.
If new investments are warranted.
What drove and Youll keep making them.
Yes.
We expect currently expect SG&A to be fairly ratable throughout the year and as such Q1 expenses, a fair proxy for future quarters, excluding the.
The normal impacts of certain human capital costs, such as merit, which kicks in in April and normal course on boarding onboarding of incremental head count as a general comment R&D spend that can be a bit more lumpy. However.
However, Q1 spend that the decent anchor point for which any given quarter. It may have.
Moderate.
Variability from our.
Current guidance, which as a reiteration of the.
Guidance from February 29 factors all of this and so there is all of the.
The investments that we're talking about and all the trends that I just spoke about in SG&A and R&D is all factored in to the guidance that we've given.
Okay, and lastly, I am sorry, I am asking any questions I know several of US have touched on the same thing I just wanted to be clear in your guidance with regards to established brands.
Yeah.
Based on the other moving parts.
I am correct in assuming you and what you see today, you see that line dropping somewhat precipitously back to much lower levels as early as this quarter, correct or or or should we assume your guidance is just always conservative and youll take that on a quarter by quarter basis, then it could.
Crush again in <unk>, and then we will assume it declines from there and so on and so forth.
Yeah.
Oren: Our 2024 guidance assumed.
Oren: Established Brian supply tailwind for the first quarter and no supply tailwind in subsequent quarters and the current market environment is consistent with those assumptions.
Okay I hear you. Thank you so much congrats on another impressive quarter, yes.
Thank you Lauren.
Thank you we'll take our last question from Ken Cheng with capital One your line is open.
Ken Cheng: Great. Thanks Nikhil.
Can you just comment on the houses one milliliter vial size product is doing I know you just launched it.
This quarter any sort of feedback you're getting from rheumatologists.
Yes.
Speaker Change: Good morning, Tim and thank you for your question, we're still in the early days.
For the.
One ml vial for acute gouty arthritis.
Speaker Change: Flairs, we launched the one ml vial, specifically for us dosing size and the fact that it's appropriate for acute gouty arthritis flares, which is an indication. The competitor does not have in addition, our unique J code enables administration by physicians.
The five ml vial is largely administered on a <unk>.
You use on a self administered basis.
So again early days and we look forward to updating you on the progress of.
The one ml vial at for acute cloudy arthritis flares.
Speaker Change: Okay, great well, maybe just one follow up.
Thank you what could you sort of provide in terms of color anything to.
What sort of progress you're making on the M&A front, you know have you guys.
Speaker Change: Looked at a lot of products.
Over the past.
Months.
Could you comment on just.
What the environment looks like for you guys right now.
Yeah.
Look the.
We are continuing to evaluate multiple targets, we have evaluated targets multiple targets. Since we started we have.
Done diligence on targets in past.
The BD environment competitiveness is in line with our expectations and look we remain confident in our ability to expand the scope and scale of our rare disease business to M&A.
And I think maybe the last thing is look we're.
We remain steadfast in ensuring that were diligent and highly selective as we speak seek to deploy capital.
For Eni to find the right asset.
Or assets.
Okay.
Okay, Great that's very helpful. Thanks, Michael.
Thank you Tim.
Thank you that concludes today's teleconference. Thank you for your participation you may now disconnect and have a wonderful day.
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Okay.
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Uh-huh.
Mhm.
Yeah.
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